Tikhon Yevdokimov is Commercial Director of DHL C.I.S. He spoke to Transport in Russia about DHL activity in Russia and the express-delivery service in the country today.

Transport in Russia: What are, in your opinion, the main obstacles express-delivery companies face in Russia? DHL has operated in Russia for 17 years now. What are the postive and negative tendencies that have developed over this period?

Tikhon Yevdokimov : The market for express delivery by air is a good indicator of the situation in foreign trade in general. A good example was provided by the August 1998 crisis when the volume of express air deliveries dropped 25-35 percent, reflecting the general decline in foreign trade. At that time, DHL tried hard to preserve its share of the market and reduce losses, for which the company employed a number of methods, including offering flexible rates of currency exchange. During 1999-2000, while the Russian economy was gradually recovering from the crisis, the volumes of express air deliveries were going up and reached pre-crisis level by mid-2000. In that year we have achieved considerable growth in volumes of both cargo and parcel deliveries. During the first six months of this year, DHL's overall deliveries increased 14 percent over the corresponding last year's figure. The latest trend is the rapid increase in the proportion of parcels: from October 2000 to October 2001, the volume of parcel deliveries increased 53 percent. Naturally, the most pressing issue is obtaining simplified customs-clearance procedures for both imports and exports. If this problem is resolved, the business of express deliveries will definitely go on developing.

TiR : Smaller Russian express-delivery companies have been rather active recently. Is it possible for them to offer any serious competition to the foreign companies operating on the market?

TE : At the moment, it is too early to speak about Russian express-delivery companies as serious competitors. They need time and investment to gain professionalism and develop their own infrastructures and networks to be able to provide services of an adequate level and variety both within Russia and beyond. Meanwhile, the "giants" are not losing time and keep on putting huge funds into their development. During the 17 years it has operated in Russia, DHL has invested more than $50 million in developing its infrastructures in Russia, including $15 million during the last three years and more than $5 million in 2000. Among the most dynamic Russian companies operating on the market I would name EMS Garantpost and Pony Express. According to data at our disposal, the market is currently shared as follows: DHL – 51 percent; UPS – 10 percent; TNT – 19 percent; FedEx – 7 percent; Pony Express – 5 percent; EMS – 5 percent; other companies – 3 percent.

TiR : In which spheres are express-delivery services most in demand? What are the prospects for the business in Russia?

TE : Throughout the world, the main clients of DHL are large transnational companies, such as Procter & Gamble, Pepsi-Cola, Nestle, Robert Bosch, Siemens, Sony, Philip Morris, Philips, General Motors, Ford, PricewaterhouseCoopers, etc. In Russia, DHL employs the same approach, though the proportion of smaller companies as clients is permanently increasing and has reached 65-70 percent now. Express-delivery services are mainly used by corporate clients – Russian companies that maintain permanent business ties with other Russian companies – and foreign companies, primarily from the financial and banking sector and also from the oil and gas industry, engineering, construction, trade and consumer services. The latter segment is mostly represented by advertising and market-research agencies, and, in some regions, also by scientific institutes, individual entrepreneurs and legal firms.

Competition has been and will be the highest in Moscow, which is the center of business and the most promising and dynamic market.